Most overseas remittances to Vietnam have been used for meeting daily expenses and for purchasing gold, according to the Central Institute for Economic Management (CIEM).

A study by CIEM and Western Union, released on December 17, to review overseas remittances to Vietnam and their contribution to the country's socio-economic development showed that more than 35 percent of these remittances were used for daily expenses; 16 percent for business purposes; and the remainder was spent on casual shopping, debts, fees for healthcare services, and so on.

"More than 16 percent of overseas remittances was poured into production, and businesses have played the role of a life vest for investors who had difficulty accessing bank loans due to strict regulations," it added.

In terms of investment, one-third of the surveyed remittance recipients put the money into savings accounts, 27-30 percent invested in production, 20 percent invested in gold trading, and 16-17 percent invested in the real estate market.

Statistics reported by the State Bank of Vietnam's HCM City branch told a different tale, revealing that overseas remittances were mostly invested in production and the property sector over the past three years.

Vo Tri Thanh, CIEM's deputy director, said this year that Vietnam ranked amongst the world's top recipients of overseas remittances.

The total remittances to the homeland so far this year have been estimated at 11-12 billion USD and will likely remain unchanged for the next two years, Thanh remarked.

The total remittance value was equivalent to 8 percent of the country's GDP.

In the period 1991-2013, the annual average growth rate of overseas remittances to Vietnam was 38.6 percent, with a total value of 80.3 billion USD.

Some 57 percent of Vietnam's remittances came from overseas Vietnamese living in the United States, followed by those residing in Canada (8.4 percent), Germany (6 percent), Cambodia (4 percent), and France (4 percent).

He added that the remittances have had a positive effect on the economy as they increase the country's foreign currency reserves.

In addition, remittances invested in stocks and the property sector have been on the decline, which is a positive sign for remittance flows.

In the period 2007-13, overseas remittances were the second-largest source of income for Vietnam after foreign direct investment and a higher than disbursed ODA.

In the period 2004-06, remittances formed the largest source of capital inflow into Vietnam.

According to the Bureau of Consular Affairs, last year, more than five million Vietnamese were living and studying in 104 countries and territories.

The number of Vietnamese labourers in foreign countries was expected to rapidly increase in the coming period after Vietnam integrated with the world and the region.

The CIEM-Western Union study also showed that 25 percent of remittances had been transferred through informal channels.-VNA